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Friday, February 26, 2016

Energy Issues and Market Forces in 2016

Market forces may be the primary driver of energy shifts in 2016. The future of energy in the long term is clear, more efficiency and renewables and less fossil fuels. While we are already moving forward on all these fronts no one can predict exactly how long it will take to supplant fossil fuels.

It is clear that we are seeing tremendous growth in renewable energy and this can be expected to continue in 2016 and beyond. Although fossil fuels appear to be in their death throes, it may take far longer for hydrocarbons to die than some optimistic enviro-pundits are predicting.

In the wake of the COP21 deal signed by every nation on earth it is apparent that we will be substantially reducing greenhouse gas emissions. However, no one should expect that the fossil fuel industry will go quietly, even if it they are the primary cause of climate change.
As Exxon's crimes have demonstrated, the oil industry's self interest takes precedence over the well-being of the Earth and humanity. They have and will continue to use their considerable power to push back against regulations that undermine their interests. They will use their psuedo-science to counter credible science, and their minions in the Republican party will continue to stymie any legislation that threatens their core business. They will also attack and discredit anyone who has the audacity to speak the truth.

The glut of oil may be attenuated somewhat in 2016, but their is a wicked logic to increasing rather than decreasing extraction. Bringing as much oil to market as possible in the short term is one way of mitigating longer term risks. This may cause many oil producers to be reluctant to reduce extraction. It should be noted that those companies that are scaling back extraction in 2016 are doing so for financial reasons not COP21 and certainly not concern for the planet.

Market forces are driving sustainability into the DNA of the business community. According to the 2016 Energy and Sustainability Outlook Survey by Ecova, the majority of the 700 energy, sustainability, facility and finance professionals surveyed indicated that cost savings remain the number one driver of energy and sustainability management decisions. They are looking to new approaches with many respondents saying that they intend to use data collection and monitoring devices to manage resources. A large and growing number of respondents plan to use energy data to increase financial efficiency and guide budgetary decisions in 2016.